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June 11, 2013

TCPA Class Actions Continue to Clog Courts’ Inboxes

We have previously
discussed class action lawsuits raising claims under the federal Telephone Consumer
Protection Act (TCPA), involving allegations of improper use of cell phone
numbers to send unsolicited text messages, faxes, or calls to consumers. Last month, Papa John’s agreed
to pay $16.5 million to resolve a “text spamming” nationwide class action
certified in November (and reported on here). The proposed
settlement, which must still be approved by the federal judge overseeing
the case in the Western District of Washington, provides that each class member
who submits a claim will receive a $50 payment from Papa John’s, and all class
members will automatically receive a voucher for a free Papa John’s pizza.

Papa John’s is far from the only company dealing with TCPA
class action allegations. Last month, a
federal judge also approved a $10
million settlement resolving a text spamming class action against shoe
retailer Steve Madden. Another federal
court recently rejected The
Coca-Cola Co.’s attempt at dismissing a
TCPA text spamming putative class action, noting that all is required to plead
a valid TCPA claim was that a call or text was made to plaintiff’s cell phone,
and that it was done using an automated dialing system.

These are just a few examples of the surge
of class action lawsuits brought under the TCPA in recent years, as plaintiffs
and their counsel are drawn to the enticing possibility of statutory damages in the amount of
$500 for each violation and up to $1,500 for each willful violation. While some defense attorneys have high hopes that the Supreme
Court’s recent Comcast decision might make
certification of TCPA class actions more difficult, it is unclear what effect
the decision might have on courts handling TCPA cases. On one hand, while not citing Comcast, California federal judge just
this week denied class
certification in a lawsuit alleging that phone sex operator Network
Telephone Services violated the TCPA by sending unsolicited text messages, holding
that the class was unascertainable and that individual issues, such as whether
class members had seen disclosures of text message practices and whether the
class member had attempted to opt-out, predominated. On the other hand, a Florida judge last week
vehemently rejected
a reconsideration request made by a TCPA defendant on the grounds that the Comcast decision justified revisiting
the court’s prior class certification decision.
Judge Scola of the Southern District of Florida held that he did not
believe that the Comcast decision
“treads any new ground in class action law” and rather the case simply “restates
rules from Wal-Mart Stores v. Dukes,
131 S. Ct. 2541 (2011), and other prior decisions.”

To throw even more fuel on the TCPA fire, at the end of May
the FCC issued a declaratory
ruling that sellers who are using third-party telemarketers may still be
vicariously liable for the third parties’ violations of the TCPA under
principles of agency. According to the
FCC, companies that hire third party marketers to promote on their behalf can
still be liable for unauthorized conduct of that third party, “if the seller
knew (or reasonably should have known) that the telemarketer was violating the
TCPA on the seller’s behalf and the seller failed to take effective steps
within its power to force the telemarketer to cease that conduct.”

One thing is clear: just as unsolicited phone calls, texts,
and faxes continue to pester American consumers, TCPA lawsuits continue to
flood into courts around the country and cause substantial annoyances for
companies across the country.